Long -term investment is the key to sustainable efficiency on the stock market because it makes short -term volatility and makes the fundamental value of a company possible to shine through. Tech giant Nvidia (Nasdaq: NVDA) stands first Generative artificial intelligence (AI) Growth. But because the hype inevitably fades and new opportunities such as robotics and self -driving cars may be their turn in the sun, how will Nvidia react?
With around 88% of sales ($ 30.8 billion) from its data centers segment, Nvidia is very overexposed to the market for generative AI hardware. This under-diversification brings the tech giant to a dangerous position, especially since customers continue to lose money to their AI projects and new cheap rivals such as the Deepseek of China cause shareholders to question the long-term profit potential of industry.
With the growing popularity of adapted chips, important AI customers such as OpenAi Nvidia can also bypass and design their own hardware through partnerships with FAB companies such as such as such as Taiwan Semiconductor Manufacturing.
But although generative AI now dominates the story of Nvidia, it was not always the case. The company has a history of shifting focus to tackle emerging trends. As recently as Fiscal 2022, VideoGame and Crypto Mining Hardware (NVIDIA’s Gaming segment) represented about 46% of the total turnover ($ 12.46 billion) compared to only 9.4% today, because AI-related growth once crucial opportunities has overshadowed.
NVIDIA’s fast business transformation emphasizes the versatility of its nuclear technology, the graphic processing unit (GPU), a type of computer chip that uses parallel processing to perform multiple calculations at the same time. And in the coming 10 years, investors must expect that GPUs will continue to find new use, even if the demand with regard to generative AI delays. Robotics and autonomous vehicles look promising.
According to analysts at McKinsey & Company, autonomous driving can yield $ 300 billion to $ 400 billion in income by 2035, because car manufacturers benefit from technology for Software as a service (SaaS). And just like generative AI, self -driving cars must process large amounts of data quickly and accurately, making this industry a potential gold mine for Nvidia and its leading GPUs.
Tesla is a good example of the possible scale of the chance. Despite the fact that it does not offer known generative AI Large Language Model (LLM), the automaker is one of the most important customers of Nvidia. It accumulates tens of thousands of GPUs to build its dojo-super computer, which is designed as the brain behind its full self-driving (FSD) platform.
